1
MLO Test Questions with Answers (100% Correct
Answers)
This form of occupancy would have the lowest interest based on risk—
Answer: owner-occupied
This form of occupancy would have the highest interest based on
risk— Answer: non-owner occupied
Characterized by ownership extending only to the interior dwelling
and the shared ownership of common external areas by residents—
Answer: Condominium
Conforming mortgage limit for a single-family residence in most states
is:— Answer: $484,350
The following entities buy or guarantee loans secured by real estate on
the secondary market— Answer: Fannie Mae
Freddie Mac
Ginnie Mae
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,2
The entity that insures a loan and does not use Private Mortgage
Insurance— Answer: Federal Housing Administration
The process of evaluating a loan for approval in accordance with
predetermined lender guidelines— Answer: Underwriting
Commercial banks, savings and loans, mortgage bankers, and
mortgage brokers are examples of— Answer: Primary mortgage
market lenders
A first mortgage by a lender, not insured by an agency of the federal
government is a(n)— Answer: conventional mortgage
The process of working with multiple lenders to find the best loan for a
borrower is— Answer: Brokering
The primary role of this person is to verify the information in a loan
application and prepare the file for underwriting.— Answer:
Processor
The document that outlines outstanding approval conditions is known
as— Answer: Conditional approval
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,3
After a loan closes, an entity will collect a borrower's monthly
payments and report the payment history to the credit bureaus. This
process is:— Answer: Servicing
Generally, any property that generates income can be referred to as:—
Answer: Non-owner occupied
Rental property
Investment property
Unimproved real property is— Answer: Land
The electronic system that provides recommendations that lenders use
to determine if a loan file meets secondary market underwriting
guidelines— Answer: Automated underwriting system
The electronic automated underwriting system for Freddie Mac—
Answer: Loan Prospector
The electronic automated underwriting system for Fannie Mae—
Answer: Desktop Underwriting
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, 4
Conventional real estate financing considers a minimum of _____ years
of stable employment and a continuance of non-employment income
(child support) for ______ years— Answer: 2,3
An applicant is 78 years old and wants to purchase a new home. The
loan program he wants is a 95%, 30-year fixed rate at 5.125% interest
rate. Can he obtain financing.— Answer: Yes. There is no maximum
age limit
An applicant came to the U.S. from Canada on a work visa two years
ago to work for an engineering firm. She wants to purchase a home.
Can she obtain financing?— Answer: Yes, as long as the lender can
determine eligibility status
A borrower has just closed on a primary home purchase loan. What is
the requirement for occupying the home?— Answer: Must be
occupied by the homeowner within 60 days
An applicant completed a loan application for a purchase of an
existing home. How long will the documentation be valid before an
updated application will be required?— Answer: 120 days
© 2025 All rights reserved
MLO Test Questions with Answers (100% Correct
Answers)
This form of occupancy would have the lowest interest based on risk—
Answer: owner-occupied
This form of occupancy would have the highest interest based on
risk— Answer: non-owner occupied
Characterized by ownership extending only to the interior dwelling
and the shared ownership of common external areas by residents—
Answer: Condominium
Conforming mortgage limit for a single-family residence in most states
is:— Answer: $484,350
The following entities buy or guarantee loans secured by real estate on
the secondary market— Answer: Fannie Mae
Freddie Mac
Ginnie Mae
© 2025 All rights reserved
,2
The entity that insures a loan and does not use Private Mortgage
Insurance— Answer: Federal Housing Administration
The process of evaluating a loan for approval in accordance with
predetermined lender guidelines— Answer: Underwriting
Commercial banks, savings and loans, mortgage bankers, and
mortgage brokers are examples of— Answer: Primary mortgage
market lenders
A first mortgage by a lender, not insured by an agency of the federal
government is a(n)— Answer: conventional mortgage
The process of working with multiple lenders to find the best loan for a
borrower is— Answer: Brokering
The primary role of this person is to verify the information in a loan
application and prepare the file for underwriting.— Answer:
Processor
The document that outlines outstanding approval conditions is known
as— Answer: Conditional approval
© 2025 All rights reserved
,3
After a loan closes, an entity will collect a borrower's monthly
payments and report the payment history to the credit bureaus. This
process is:— Answer: Servicing
Generally, any property that generates income can be referred to as:—
Answer: Non-owner occupied
Rental property
Investment property
Unimproved real property is— Answer: Land
The electronic system that provides recommendations that lenders use
to determine if a loan file meets secondary market underwriting
guidelines— Answer: Automated underwriting system
The electronic automated underwriting system for Freddie Mac—
Answer: Loan Prospector
The electronic automated underwriting system for Fannie Mae—
Answer: Desktop Underwriting
© 2025 All rights reserved
, 4
Conventional real estate financing considers a minimum of _____ years
of stable employment and a continuance of non-employment income
(child support) for ______ years— Answer: 2,3
An applicant is 78 years old and wants to purchase a new home. The
loan program he wants is a 95%, 30-year fixed rate at 5.125% interest
rate. Can he obtain financing.— Answer: Yes. There is no maximum
age limit
An applicant came to the U.S. from Canada on a work visa two years
ago to work for an engineering firm. She wants to purchase a home.
Can she obtain financing?— Answer: Yes, as long as the lender can
determine eligibility status
A borrower has just closed on a primary home purchase loan. What is
the requirement for occupying the home?— Answer: Must be
occupied by the homeowner within 60 days
An applicant completed a loan application for a purchase of an
existing home. How long will the documentation be valid before an
updated application will be required?— Answer: 120 days
© 2025 All rights reserved
